Industria REIT buys another Melbourne industrial asset

Leased to Downer Utilities Australia, the Derrimut asset returns $700,400 in annual rent.

Industria REIT has bought a second Melbourne warehouse in as many months, this time in Derrimut.

The listed group, managed by APN Funds Management and with more than 20 assets under management, is paying $10.6 million for 1 West Park Drive, about 20 kilometres from the CBD.

Fully leased to Downer Utilities Australia, which pays annual rent of $700,400, Industria REIT is acquiring the property on a 6.6 per cent yield.

JLL brokers Tony Iuliano and Adrian Rowse closed a tender campaign for this site in July, 2018.

Both the marketing agency, and Industria REIT, via this statement published yesterday, acknowledged the asset offers future rental growth.

Downer pays about $69.50 per square metre per annum to lease the factory – below what agency-based research houses report as the average ($75 per square metre, per annum, plus incentives).

On a 2.1 hectare block at the north-west corner of Boundary Road, 1 West Park Drive contains a 10,078 square metre warehouse, an adjacent B-Double compliant hardstand area, and parking for around 160 vehicles.

The Industrial 2 zoned block is also high profile – being at the entrance to the West Park Industrial Estate -within an area the marketing agents call “Australia’s logistics heartland”.

“The acquisition is consistent with our strategy of owning high quality real estate that is well located and offers an affordable proposition to Industria’s clients,” Alex Abell, an Industria REIT fund manager, said of the deal.

Industria REIT expects to settle on its Derrimut purchase in 10 days.

Two months ago, the fund manager paid $15.7 million for an Epping manufacturing and distribution facility occupied by Edlyn Foods. That holding, also covering 2.1 hectares of land, was acquired from MPG Funds Management on a yield of 7.5 per cent.

 

Marc Pallisco

A freelance property writer and experienced analyst, Marc is the co-founder of realestatesource.com.au

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